Il Giappone sta SCATENANDO il debito degli Stati Uniti: è in arrivo un’IMPLOSIONE del mercato glo…

Il Giappone sta SCATENANDO il debito degli Stati Uniti: è in arrivo un’IMPLOSIONE del mercato glo…

Recently, I’ve seen several quite sensationalist videos here on YouTube about Japan and the crumbling US bond market. Today, let’s take a minute, step back, and calmly unpack the most recent events and how they may impact you. Japan’s latest economic gamble is indeed sending shock waves through global markets. It is rattling Wall Street, spooking currency traders, and raising urgent questions about the future of American borrowing. It all began when Japan’s government approved a massive multi-billion dollar stimulus package, one that analysts warned could undermine not only Japan’s financial stability, but also the United States economy. The backlash was immediate. As the yen tumbled to levels unseen in nearly a year, Japan’s finance officials began firing off verbal warnings signaling possible intervention to prop up their sinking currency. The yen briefly jumped after finance minister Satsuki Katyama cautioned that Tokyo might step in to counter what she called volatile and speculative market moves. But that bounce did very very little to change the big picture. And the big picture is the yen is weak, markets are very nervous and Japan’s fiscal situation is spiraling into a global problem. It is. Some economists, for example, Peter Schiff, have gone as far as warning that Japan could inadvertently torpedo the US economy, and the numbers are very difficult to ignore. The yen has already lost, believe it or not, around 6% of its value since Prime Minister Senate Takayichi came into power. The decline is driven by her very aggressive spending policies. Japan’s worsening fiscal outlook paired with pressure on the Bank of Japan to maintain ultra loose monetary policy has created a dangerous mismatch. More spending, more debt, but no tightening in sight. The result is something very rare and very unsettling. Japanese government bonds and the yen falling at the same time. That pattern often signals two things. one, capital flight, and two, deep market distrust. Some analysts even see echoes of the UK’s 2022 bond meltdown when unfunded tax cuts triggered chaos in the guilts market. Remember that? But Japan’s situation has an added twist to it. Its choices carry far heavier global consequences. I will write about this more uh in greater detail over on my substack and my patreon. Both are linked in the description below. So please make sure that you are subscribed to stay updated. This is very very important and very consequential. And you know what? Here’s the most troubling part of the story. For decades, Japan has been America’s financial anchor as it has been buying more US Treasury debt than any other country in the world. At its peak, Japan held $1.2 trillion with a t trillion dollars in US bonds, effectively subsidizing America’s spending habits and keeping US mortgage and credit rates low. But those days are ending. They’re gone. As yields on Japanese bonds surged to their highest levels in decades, for example, 20-year yields have hit levels not seen since 1990s. 30-year yields broke above 3.3%. Japanese investors suddenly have reasons to keep their money at home. And this is what the United States does not want. So, who’s going to finance America’s outofc control government spending? That is the big question. The math that made Japan the world’s biggest lender simply does not work anymore. Rising yields mean higher returns domestically. An aging population needs its savings. And the new regulations are pushing major insurers to buy more Japanese ultralon bonds. In the third quarter alone, Japanese investors sold nearly $62 billion in US treasuries. That is not diversification. No matter what people want you to believe, that’s an exit. Wall Street is finally paying attention. Analysts at CIA General, for example, warned the shift could trigger a so-called global market Armageddon. Charles Schwab recently cautioned that repatriation of Japanese capital could push US yields even higher. And market veterans say this marks the end of an era, the end of America’s four decade run of cheap borrowing subsidized by foreign buyers. And guess what? You’re already feeling the effects of this. Mortgage rates that were sitting near 2.6% 6% during the pandemic are now hovering close to 7%. Credit card rates are at record highs. Car loan rates are rising. And as Japanese investors step back, buyers of US treasuries demand higher yields, raising borrowing costs for corporations, for consumers, and the US government, too. This is the part that nobody wants to confront. Japan’s retreat is not temporary. This is not just a matter of a couple of days. This is a structural retreat. The country is aging. It is drowning in debt that is worth 235% of its GDP. Its bond market is breaking under the weight of endless stimulus. And its new prime minister is locked in an escalating economic confrontation with China. From tourism boy bycotss to seafood bans to military pressure, everything is now on the table. At home, Japan needs money for defense, for stimulus, for currency support, and for mounting debt service. But recent bond auctions have disappointed, leaving the government with few options. If Japan raises rates to strengthen the yen, its debt costs explode. If it doesn’t raise rates, the yen keeps collapsing. Either path actually accelerates the unraveling of a system that once seemed permanent. And then there is the carry trade. I have an entire video on uh that here on my channel. This is the global financial machine effectively that is built on borrowing cheap yen to buy higher yield assets. When the yen is stable, the carry trade fuels everything from US stocks to emerging market bonds. But when Japan’s monetary world begins to wobble, when it begins to tumble, that entire trade can unwind in days. We saw hints of this uh when the S&P 500 dropped 3% in a single day last year after a brief yen surge. With Japan now losing control of bond yields and currency stability domestically, the risk of a violent carry trade reversal is rising again. So what happens next? Americans need to prepare for a world where money is no longer cheap. Locking in fixed rate debt becomes essential because adjustable rate loans will climb as treasure yields rise. There is no other way around it. Analysts at Black Rockck and Morgan Stanley now recommend adding a variety of assets to your portfolio such as real estate investment trust, gold, commodities, and alternative strategies. volatility will become the norm, not the anomaly. This is not transitory. Japan’s fiscal crisis is not just a story about another country’s budget problems. It is a turning point in global finance, an inflection, if you will, an inflection moment where the world’s most reliable foreign creditor steps back, forcing the United States to compete for global capital at a time of massive deficits, political division, escalations in the geopolitical world, and rising interest costs, too. In other words, the 40-year arrangement that allowed America to borrow cheaply while Japan picked up the tab is now ending. It is over. Japan is simply out of money, out of demographic strength, and likely out of illusions. For a generation, America lived on borrowed time and borrowed money. And that time is now ending. The transition will be very turbulent, but understanding what’s happening and why is the first step in preparing for a world where the easy money era is over and a new, more uncertain financial chapter has already begun. Let me know what your thoughts are on these recent developments. I would love to hear from you. And make sure that you check out my Substack and Patreon for more on this topic. Thank you so much for watching. Uh if you’d like more content, join me on my social platforms. They’re linked in the description below. Like, subscribe, and share. Show your support. It means a lot. And I will see you back here tomorrow. Take care.

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* Japan’s latest economic gamble is shaking the global financial system—and today we step back and unpack exactly what’s happening, why it matters, and how it could directly impact YOU.

Japan’s new multi-billion-dollar stimulus package has triggered market turmoil, sent the yen plunging, and raised serious questions about the future of U.S. borrowing. With the yen hitting its weakest levels in nearly a year, Japan’s finance ministry is signaling possible intervention—but markets aren’t convinced. Economists warn Japan’s aggressive spending could unintentionally destabilize the U.S. economy, especially as Japanese government bonds and the yen fall simultaneously, a rare and alarming signal of capital flight and market distrust.

For decades, Japan has been America’s biggest foreign lender, buying trillions in U.S. Treasurys and keeping American borrowing costs low. But that era is ending. With domestic Japanese bond yields soaring to 20- and 30-year highs, investors now have strong incentives to bring their money home. In just one quarter, they dumped $62 billion in U.S. Treasurys—an exit that analysts warn could push U.S. yields even higher.

This shift affects YOU: mortgage rates near 7%, record credit-card APRs, rising car-loan costs, and a U.S. government suddenly facing higher borrowing rates after 40 years of cheap money fueled by Japan. As Japan battles aging demographics, 235% debt-to-GDP, weak currency, and rising geopolitical tensions with China, the country no longer has the capacity to subsidize America’s spending.

Even more dangerous: an unstable yen threatens the global “carry trade,” which supports everything from U.S. stocks to emerging markets. A carry-trade unwind could trigger rapid market volatility—something analysts at BlackRock, Morgan Stanley, and Société Générale say is now a real possibility.

This is a financial turning point. The era of easy money is over. The world is shifting. And understanding this transition is essential for protecting yourself and your finances.

#geopolitics #globaleconomy #geopolitics2025 #carrytrade #japanbondmarket